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Questions

ECON 4002.01 SU2025 (11437) Exam 1

Numerical

In 2020, in the country of Fornesia, the total household consumption was $1000 million, and households paid taxes of $200 to the government. The government of Fornesia spent $500 million on defence and infrastructure and $47 million on social security benefits to the public. The firms held an inventory amounting to $35 million in January 2020, and the total inventory amounted to $50 million at the end of December 2020. The firms invested $25 million as fixed investment in capital. The capital depreciated by $5 million in 2020. Fornesia exported $90 million worth of goods abroad and imported $75 million from other foreign countries.  In 2019, Fornesia GDP was $1455. What is the GDP growth in 2020? (answer in terms of percentages, up to 2 decimal places)?

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Step-by-Step Analysis
In tackling this numerical question, I will first restate the key data and then outline the standard approach to calculate GDP growth. Key data for 2020: - Household consumption (C) = 1000 - Government spending (G) = 500 on defence and infrastructure (transfers like social security benefits are not counted in G) - Exports (X) = 90 - Imports (M) = 75 - Fixed......Login to view full explanation

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